Wells v Fair Work Ombudsman

REASONS FOR JUDGMENT 1 Wendy Ann Wells, the appellant, appeals against declarations and orders made by the primary judge that she was involved in: (a) a contravention of s 902(1) of the Workplace Relations Act 1996 (Cth) (the Act) in relation to the dismissal of Mrs Sharon Williams; (b) a contravention of s 902(1) of the Act in relation to the dismissal of Mr Jeffrey Golding; and (c) a contravention of s 901(1) of the Act in relation to the offer of a contract to Mrs Sharon Williams. 2 The appellant also challenged the amount of the penalties imposed for the contraventions. The primary judge imposed penalties of $4,620 in respect of each contravention, a total of $13,860. 3 Section 902(1) of the Act provides: (1) An employer contravenes this subsection if: (a) the employer dismisses, or threatens to dismiss, an individual who: (i) is an employee of the employer; and (ii) performs particular work for the employer; and (b) the employer's sole or dominant purpose in dismissing or threatening to dismiss the individual is to engage the individual as an independent contractor to perform the same work, or substantially the same work, under a contract for services. (2) Sub-section (1) is a civil remedy provision. (Emphasis added). 4 Section 901(1) of the Act provides: (1) A person contravenes this subsection if: (a) the person offers to enter into a contract with an individual; and (b) the person makes a representation to the individual that the contract, if entered into, would be a contract for services under which the individual would perform work for the person as an independent contractor; and (c) the contract, if entered into, would be a contract of employment under which the person would be the employer of the individual, rather than a contract for services under which the individual would perform work as an independent contractor. (2) A person does not contravene subsection (1) if the person proves that, at the time the person made the representation concerned, the person did not know that, and was not reckless as to whether, if the contract were entered into, the contract would be a contract of employment rather than a contract for services. (3) Subsection (1) is a civil remedy provision. (Emphasis added). 5 Mrs Wells and her husband were directors and shareholders in Maclean Bay Pty Ltd (Maclean Bay), which was the operator of a resort at Bicheno in Tasmania. 6 Mrs Williams was employed by Maclean Bay as a receptionist until she was dismissed on 1 December 2008. Mr Golding was employed by Maclean Bay as a gardener until he was dismissed in early December 2008. Mrs Wells wished all employees at the resort to be engaged as independent contractors. 7 Dealing first with the s 902(1) contravention in relation to Mrs Williams, the primary judge found in the reasons for judgment delivered on 16 January 2012 (the reasons) at [50] as follows: I am satisfied that after Mrs Wells was told by Mrs Robinson [the manager] that Mrs Williams was unhappy about being an independent contractor, Mrs Wells decided to terminate Mrs Williams' employment. I am also satisfied that she telephoned Mrs Williams on the morning of 1 December 2008 to dismiss her because of her expressed reluctance. 8 The primary judge said at [62]: I am satisfied that Mrs Wells, and Mrs Wells alone, decided to dismiss Mrs Williams because Mrs Robinson had told her that Mrs Williams was not happy about becoming an independent contractor. Mrs Wells wanted all staff at the resort to be independent contractors and was not prepared to have anyone work at the resort who resisted her plan. At the very least she decided that Mrs Williams should be dismissed for her reluctance to become an independent contractor. Once it became apparent to Mrs Wells that Mrs Robinson and Ms Holmes [the assistant manager] needed Mrs Williams to work at the resort Mrs Wells was prepared to have Mrs Williams return to work, but only as an independent contractor. In the termination conversation, Mrs Wells asked Mrs Williams if she would be happy to change to a contractor. The negative response sealed Mrs Williams fate and secured her dismissal. (Emphasis added). 9 In relation to Mr Golding, the primary judge found at [112]: I find that Mrs Wells' dominant purpose in terminating Mr Golding was that he did not want to enter into a contract for services. Maclean Bay, as at 1 December 2008, wanted Mr Golding to enter into a contract for services, performing the same work that he was performing for it as an employee. He refused to do so. Mrs Wells then directed Ms Holmes to terminate his employment. (Emphasis added). 10 In each of these findings, the primary judge determined that Mrs Williams and Mr Golding were dismissed because they did not wish to become independent contractors. 11 Counsel for the appellant contended that these findings did not establish a contravention of s 902(1) by Maclean Bay. As there was no contravention by Maclean Bay, Mrs Wells could not be found liable as an accessory. The purpose of the dismissal required by that section is a purpose to engage the individual as an independent contractor. The purpose found, so it was argued, was not a purpose to re-engage the employees, but rather to dismiss them as they would not become independent contractors (we observe that this argument was somewhat hidden below as the main contention was that the employees were no longer needed or could not be afforded). 12 We agree that the findings do not bring these cases within s 902(1) for the reasons just articulated by counsel for the appellant. In view of these conclusions, it is unnecessary to consider the further arguments concerning Mrs Wells' accessorial liability because we have determined that there was no contravention by Maclean Bay for which she would have such liability. 13 Turning then to the alleged contravention of s 901(1) of the Act. After Mrs Williams was dismissed, staff at the resort wished that she return to work. In response, Mrs Wells on 6 December 2008 emailed a contract to Mrs Robinson to give to Mrs Williams. Then on 8 December 2008, Mrs Wells sent an amended form of contract to Mrs Robinson for the same purpose. What happened then, as found by the primary judge, was explained at [89] of the reasons as follows: Mrs Williams said that Ms Holmes telephoned her on 2 December 2008 to ask if she was prepared to look at a contract which would make her better off. She said that she told Ms Holmes she was prepared to look at it. Mrs Williams said she received a telephone call from Mrs Robinson on 8 December 2008 to say that the contract was ready for her to have a look at. Mrs Williams said she picked up the contract from Mrs Robinson at the resort on 9 December 2008. 14 The copy of the contract collected was the unamended version. The only difference was that the amended version had an additional duty included, namely, "daily account and information management". 15 Counsel for the appellant contended that the primary judge erred in two respects in relation to whether an offer was made to Mrs Williams to enter into a contract under s901(1)(a). The appellant did not challenge the findings in relation the two other requirements of the contravention under s 901(1)(b) and (c). 16 First, it was argued that the finding that Mrs Williams picked up the contract was an error. Counsel relied on the evidence in chief of Mrs Robinson as follows: Yes, and I cannot recall if I sent an email [attaching the contract] to give Sharon [Williams] a - because I didn't see her any more. She didn't come in to see me. I cannot recall if I sent an email to - gave Sharon an - because I didn't see her any more. She didn't come in to see me. Do you know if the contract was provided to Sharon?---I don't know. 17 The appellant argued that the primary judge did not take into account this evidence, or explain why he rejected Mrs Robinson's evidence over Mrs Williams' evidence concerning the collection of the contract. 18 We do not accept this contention. The primary judge was entitled to rely on the evidence of Mrs Williams. She was the person who took the action to collect the contract, and the probabilities favoured her version of the evidence, if there was, in truth any conflict. 19 Second, the appellant contended that 'offer' referred to in s 901(1)(a) bears the meaning it has in contract law. There was, it was argued, no intention on the part of Maclean Bay to offer the contract in the unamended form, and hence the section was not satisfied. 20 It may be accepted, without deciding, that the offer referred to requires an intention to create legal relations. The fact that the unamended form of the contract was proffered to Mrs Williams does not establish that there was no such intent. The matter must be assessed objectively. The aim of Maclean Bay arming Mrs Williams with the contract was to have her accept engagement as an independent contractor. 21 It follows that the primary judge's conclusions concerning the contraventions of s 902(1) should be set aside, but his Honour's conclusions concerning the contravention of s 901(1) should be upheld. 22 The appellant also challenged the amount of the penalties imposed for the contraventions. Following these reasons, the only extant contravention found against Mrs Wells is the contravention of s 901(1). The primary judge imposed a penalty of 70 per cent of the maximum, namely $4,620 for this contravention. The appellant has not provided any basis for concluding that the penalty for this contravention was manifestly excessive. It is accepted by the parties that the penalty should be paid to the persons nominated by the primary judge in the proportions set by his Honour. I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices North, Cowdroy and McKerracher.